The buzz around town is that 2017 was a banner year for sales. So, is it true? The answer is not a simple yes or no. There are many facets that impact a real estate market. The truth is, it depends on which side of the fence you’re on as to how you’ll measure the market activity. Let’s look at the 5 ingredients of a market, in what I would consider the order of importance: 1. Price – This of course, is the top concern for buyers and sellers. The definition of a good market to a seller will usually come down to what price they can get for their home. 2. Inventory – This is truly the one factor that can make or break a market. Inventory controls price. We all know the principle of supply and demand and how that impacts the value of a home. 3. Activity – The number of properties sold annually is a major factor and is dependent on the previous two factors. If no one is buying, it keeps inventory high and prices very low. We have two main markets on the OBX (Duck and Corolla) where the sales that take place are 100% discretionary. With no primary market forcing sales to take place, this is keeping the inventory at high levels. 4. Interest Rate – Rising or falling interest rates impact the buyer’s purchasing power. We are still experiencing very low rates, for now. All signs point to some increase this year. 5. Buying Trends – This factor is the one least considered by sellers, mistakenly. Especially in a resort market. Most sellers assume the buyers are going through the same thought process they did when buying. That simply isn’t true. Today, buyers place the most weight in their decision on condition. After 20 years in the business, this is definitely a shift in process.

So how did the Outer Banks fare in 2017 relative to each of these 5 categories? 1. Price in most locations has not changed. There is still no area with any measurable appreciation and some areas (Duck and Corolla) are still subject to some minor depreciation due to continued high inventory levels. 2. Inventory is on the decline. In 2017 we had the lowest monthly inventory levels since 2010. That is excellent news and a great sign of continued recovery for our market. 3. Activity was up over 2016. Like any market we experience cycles. Any time there is a double digit increase in sales, the next 3 to 4 years become a little stagnant. That’s just how markets cycle. When you hear that the OBX market was on fire last year, this is likely the aspect one was referring to. This increase in activity really helped lower the Days on Market. However, pricing for the market is the greatest contributor to that.

4. Interest Rates remained steady between 4% and 4.25%. Your guess is as good as mine as far as what will happen with that this year. Stock market gains are making it easier to diversify and invest in real estate. 5. More homes were passed up in 2017 because of outdated condition than any other reason. If you want to sell quickly, you’ll either need to price your home for it’s condition or invest in a few upgrades.

If you’d like more information on buying or selling this spring, contact me for more information.

Our positive sales continue with single family residential sales units remaining up 14% YTD 2017 over 2016 and the corresponding dollar volume is up 17%. Residential land sales, YTD 2017 over 2016, are up 11% in units and up 3% in dollar volume. The median sales price is up 1% year over year.

Inventory

Currently the market sits at about 10 months worth of residential inventory. This is a very encouraging sign and is a combination of strong sales and lower inventory levels. It is EXTREMELY important to remember that this varies GREATLY by area and town. We still have some areas that are not experiencing these results. It is important to understand what the number is for your area.

New inventory that came on the market in November was up 2% from November 2016. Average days on market for SOLD single family residential YTD 2017 is 152, down from 208 days in 2016! Average days on market for all current active single family residential listings remains at 215 days. Distressed residential properties comprise 6% of sales YTD which is flat to 2016. Distressed listings currently comprise only 1.5% of active inventory.

Pricing

Single family residential median sale price YTD 2017 is $323,000, which is up 3% over the year prior.

This data here represents the percentage of total homes sold in each respective year relative to the sales price range. When we see an increase in median price, it can sometimes be just more sales occurring in one price range versus an actual increase in price. I think for 2017, both are actually true. We did see actual appreciation in two markets. Kill Devil Hills Between the Highways as well as Kill Devil Hills Westside.

We had a mild August for weather, not for real estate sales. With interest rates still very low and activity increasing, we fully expect a great fall market.

Here are the main highlights:

Condition – Buyers are becoming more and more selective about the condition of the homes they buy. Their expectation is to have the updates and upgrades already done. Updates = recent roof, windows, doors, siding, paint, HVAC. Upgrades include granite counters, stainless appliances, tile or hardwood floors, cabinets in kitchen and bath. It’s clear, do the updates/upgrades or drop the price.

Homes listed and sold since January 2017 are going in only 45 days. Many with multiple offers. Buyers have been watching the market for years. They know when a house comes on the market at the right price and they are ready to act.

Residential inventory is down by 8%. This is a nice continuation of what is needed to stabilize the market in Duck and Corolla. Because those areas are primarily second homes, the inventory has been stuck very high. That has been putting more pressure on lowering prices. We are slowly getting there, yet still a year or two away.

Distress sales made up 2% of all sales for our local market. That makes these sales a complete non-issue as that is a normal amount for any market.

So far this year 18 more homes have sold in Corolla than last year (an increase of 10%). In Duck there were 34 more homes sold this year, up 38%. Overall the entire market is up by 11% (1310 homes sold 2017 vs 1176 in 2016)

If you have any questions about buying or selling on the Outer Banks, please contact me.

Total Sales: Total June sales – 279 Units – the highest monthly number of units sold since October 2005. Total Volume Sold – $427,942,964.

Under-contract: Units listed as under contract declined by 11% due to the record number of closings in June and the normal seasonal decline; however, with 410 units still listed under contract, the July sales figures should be noteworthy.

New Construction: As of May 2017, the number of new construction building permits were down 7% from 2016 (112 units vs 121 units). Building permit value was down by 3%. Quite a change from last month.

Days on the Market: For all residential properties listed in the MLS, the average Days on the Market was up slightly (3%) but down by 24% when compared with June 2016.

How Sold: In our market, 66% of all loans are conventional loans, 20% are cash, 6% are VA, 4% are FHA, 3% are Jumbo. USDAA and Other account for the remaining loans.

Distressed Sales: Distressed sales declined by 2% in June and accounted for just 5% of the total.

Inventories: Residential inventory was down by 13% in June. Lots / Land inventory was down by 16% in June.

*This information is reprinted with permission from the Outer Banks Association of REALTORS

The trend of big activity is continuing for our market. Recent news of the Fed raising the Prime Rate to 4.25% could cause our summer market to be busier than normal as people make the decision to buy before the long term rates are affected, possibly going up as high as 6%, according to history.

Here are the highlights:

Total Sales: Total sales (245 Units) for May are at their highest level since January 2005. Additionally, the total volume sold is at its highest level since 2005 (>$80 million).

Under-contract – Units listed as under contract declined by 3% due to the record number of unit sales in May and the normal seasonal decline; however, with 461 units currently listed as being under contract, June sales should also be impressive.

New Construction: As of April 2017, the number of new construction building permits were down 32% compared to last year and total building permit value was down 47%.

Days on the Market: For all residential properties listed in the MLS, the average Days on the Market has dropped dramatically to 135 days; however, when looking at just properties listed in the MLS since January (1488 units) the average Days on the Market calculation drops to 57.

How Sold: In our market, 58% of all sales use conventional loans, 22% are cash, 8% are VA, 5% are FHA, 3% are jumbo. USDAA and Other account for the remaining loans (4%).

Distressed Sales: After experiencing a steady decline for years, Bank Owned property sales were up 18% in May. Short sales continue their downward decline and are down by 7%.

Inventories: Housing inventory was down by 8% in May.

*This information is reprinted with permission from the Outer Banks Association of REALTORS

The following is a summary of the Outer Banks market as a whole, reported by the Outer Banks Association of REALTORS and reprinted with permission.

Total Existing-Home Sales: Existing home unit sales are up 19% compared to 2016.

Under-contract – With 473 units in an under-contract status, sales in May should rise dramatically.

New Construction: New Construction building permits are down 31% compared to last year and total building permit value is down 20%.

Days on the Market: For all residential properties listed in the MLS, the average Days on the Market was 162 days; however, when looking at only the residential properties listed on the MLS since January 1, 2017 (1157 units), the average days on the market was 50 days.

All-cash Sales: Nationally, 23% of all home sales are for cash. Locally, we are also selling at the national average.

Distressed Sales: Bank Owned properties and short sales made up 7% of all residential property sales in in April. So far, this year, short sales are down by 25% and bank owned sales are up 19%.

Inventories: Housing inventory was down by 15% in April.

What are the clear bright spots in this report? Inventory is down, which is desperately needed. And, those sellers willing to price the home in today’s market are rewarded with a fast sale.

Remember, most buyers will spend 12 to 18 months looking around before purchasing a second home. So they know what a good value is. When it hits the market, they are ready to move! They are also ready to pay close to the asking price.

So what does this mean for your home’s value? The areas of Corolla and Duck are still quite a mess. Southern Shores is doing somewhat better.

The data below that indicates for each price range the following:

How many homes are for sale in that range

How many have sold this year

Divided by 5.5 months = how many buyers are available in that range each month

Divided by the number for sale = the months of remaining inventory for that price range

There are 3 main things to pay attention in the real estate market right now.

We saw another rate drop today, bringing us to a new low in the last 3 months.

Residential home sales (actual closed deals) are up 22% over this same time last year.

The number of homes going under contract are also up by 22%. The market is SUPER active right now.

The homes in the best condition with the right price are even getting multiple offers. We are also seeing a lot of homes selling in less than a month with that same strategy. If you’re thinking of buying or selling a home this year, contact me for a consultation.

It’s exciting to have some good news to report! While the number of homes closed in January 2017 was identical to 2016, the number of homes going under contract is up considerably.

Closed sales for January, reflects homes that went under contract in November or December of 2016. There were 111 sold in 2016 and 112 in 2017. Not bad for a resort area.

However, in January this year we saw 231 properties go under contract. The last time the number for January was this high was in 2006 at 263. Something happened in the last 30 days to create some amazing consumer confidence. I’m super thrilled for this year’s activity!!!

Two morals of this story:

If you are interested in selling your home, there’s NO REASON to wait until March or April. The market is here NOW.

If your home is already on the market and not selling, chances are you are priced too high. It’s difficult to accept today’s prices, no doubt. Inventory levels are still too high to see appreciation. It’s unclear how long it will take to recover, since we are still in the midst of the cycle.

If you’d like to find out what your home could sell for now, click here and I’ll get you a free analysis!

If you’re interested in making an investment on the Outer Banks, click here to find out what you need to know before buying in the area.

With the change of governorship in NC during the November election, it remains to be seen what the state’s position will be on the importance of this bridge project. Governor McCrory was very committed to the project, as was his team on the DOT. We have yet to hear what Cooper’s stance is. With his main guy at the DOT being formerly involved with the EPA, it’s not looking good.

Meanwhile, I came across the letter from the SELC to NCDOT and Federal Highway Authority dated December 21, 2016. You can read that letter here. (Warning, it’s very lengthy, but has a great history and timeline of events to how we got where we are.) In the letter, something caught my attention:

“The new expectation that traffic in the study area will be significantly lighter than previously anticipated and the Transportation Agencies’ failure to incorporate this fact into their analysis.”

Part of their argument against the building of the bridge was this new expectation of traffic. I kept reading until I came across this info:

“New traffic forecasts, however, have shown that every single one of these predictions is no longer true. Travel demand will no longer exceed road capacity on 29 miles of the road network by 2035, or even 2040.”

I wanted to know why the SELC is reporting a new study shows the traffic patterns would be lower than originally predicted. In my research I found that it turns out the DOT changed their traffic numbers and projections based on national trends and actual observed traffic counts.

So, basically what happened is DOT put out new numbers, and SELC pounced with another opportunity to squash the project. While their argument is the same as it has been from the beginning, with the DOT’s own reports now showing a different projection in numbers, will the decision to build the bridge be sustained? That coupled with new leadership has me feeling a lot of doubt that it will happen.

Happy New Year! I’m really excited about what’s to come in 2017 for the real estate market on the Outer Banks. There seems to be a burst in consumer confidence, and I hope that positive effect comes to us in full force. We definitely need it!

We had a huge year for sales in 2012 and things have been pretty stable since then. It doesn’t surprise me that we saw no increase in the number of sales for 2016 from 2015. I do suspect we will have a very strong year for 2017 in terms of number of sales:

Year:

2012

2013

2014

2015

2016

Total # Sold:

2042

2093

2139

2292

2289

Increase from Previous Year

21%

2%

2%

7%

0%

The big question on everyone’s mind is still about price. We have already seen the interest rates tick up a bit. That definitely makes it a little more challenging for prices to rise. The other issue is of course, inventory. While our inventory levels are down quite a bit, 14% to be exact, we still have an over 12 month supply of properties for sale, in the overall market.

In a few of our specific markets, like Duck and Corolla, the inventory levels are much higher, nearly 24 months’ supply. The number of buyers would have to triple to bring inventory to an 8 month supply. Which is still slightly high. With the latest bridge developments, I’m not sure why the number of buyers would go up that much. So those areas could still be plagued with an extreme oversupply of inventory, continuing to suppress the pricing.

Meanwhile, the opportunity to buy a home at a great price, with great rental income is high! Click here for the checklist of what to know before buying on the Outer Banks.

If you’re thinking of selling this year, let’s chat about what I can do for you!